Purchase of Macy's building a step closer to reality for St. Paul Port Authority

A view of Macy's in downtown St. Paul in December 2012. (Pioneer Press: Ben Garvin)

The St. Paul Port Authority moved a step closer toward buying the vacant Macy's department store on Wabasha Street in downtown St. Paul as well as the adjoining 550-car parking ramp for $3 million.

The Port Authority's credit committee met Tuesday to discuss the potential purchase and unanimously voted to support it.

The five committee members expressed strong confidence that holding onto the site until a qualified buyer approaches the agency with a worthy redevelopment proposal was a safe bet, as interest from the development community was high.

Port Authority President Louis Jambois said the parking ramp is generating positive cash flow and will help cover holding costs. The full board will make a final determination on the purchase next Tuesday. The deal is expected to close with Macy's the following day.

The 2.25-acre site contains a 529,000-square-foot building, including 360,000 square feet of retail space shuttered by the department store chain a year ago. The rest is parking.

Two groups signed purchase agreements for the building with Macy's last year, but both deals fell through for undisclosed reasons.

"We're going to be recognized for some pretty spectacular work because we are changing the landscape and the skyline of St. Paul," said credit committee chair John Bennett, a commercial banker.

Ramsey County has estimated the market value of the building at $4 million. Monte Hilleman, a vice president of development with the Port Authority, said the building sits over an underground oil tank that was closed years ago by the Minnesota Pollution Control Agency.

With major urban redevelopment projects, "you almost always count on the presence of contamination," Jambois said.

Board documents indicate that if a buyer doesn't buy the building as is before next winter, the Port Authority hopes to "create a shovel-ready site for a future development, meaning demolition."